Lyft and Uber lure passengers with low fares, but those prices may not last

Ridesharing giant Lyft went public in March. Its bigger rival Uber said it will follow with its own IPO on Friday. Their IPO filings to the Securities and Exchange Commission lifted the veil for the first time on the sustainability of their business models and — for now, at least — their low prices.

Ride-sharing services are designed to undercut traditional taxi cabs by allowing passengers to share a ride for a cheaper price. Ideally, this results in higher revenue for the driver, but only if they manage to pick up other customers en route. If one person takes a ride-share and the driver finds no other passengers, the Uber or Lyft driver may end up losing money.

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